The Internet of Things (IoT) is transforming supply chains by enabling real-time data collection, automation, and enhanced decision-making. IoT-enabled sensors on products, vehicles, and machinery are allowing businesses to track inventory and monitor conditions. However, managing the vast amounts of data generated by IoT devices presents challenges in ensuring traceability and security. Traceability technology offers a promising solution to these issues.

What is the Internet of Things (IoT)?

The Internet of Things (IoT) refers to a network of interconnected devices that can exchange data. In supply chains, IoT devices help track products and automate monitoring conditions. IoT tracking system collect valuable real-time data, enabling better decision-making and improving operational efficiency across the supply chain.

The Technology behind the Internet of Things

The number of components that support the native integration of 5G in industrial and consumer devices is constantly increasing, above all for the Smart metering, the Smart Logistics and the Smart asset Management. In 2024, 72 System on chip were recorded globally. The life of battery-powered devices remains one of the major constraints and new solutions are reducing consumption, both on the terminal side and on the network side. In fact, Mobile Private Network installations are growing, there are now 198 private networks in Europe, more than 500 in total of private 5G networks.

Furthermore, support for low-capacity devices will be further expanded, including satellite communication enablement to ensure global coverage even in remote areas thanks to non-terrestrial networks. The combination of IoT and Space offers new scenarios of technological innovation, helping to make resource management more efficient and to ensure continuous global coverage, essential for mission-critical applications in global logistics. Moreover, ultra-economic sustainable solutions for asset tracking and inventory management are increasing, especially with LPWA, the Low Power Wide Area technologies. LoRaWAN, on the other hand, has not seen significant technological updates in recent months, but continues to represent one of the main technologies for Low Power Wide Area Networks (LPWAN).

At the same time the increasing integration with Non-Terrestrial Networks (NTN) is helping to expand the coverage of the network, enabling applications in remote contexts, while the strengthening of the certification program ensures greater interoperability between devices from different manufacturers. Bluetooth Low Energy technology has introduced the recent release 6.0, which improve the localization accuracy (via Channel Sounding). The main voice assistant platforms (for example Amazon, Google, Home Assistant, etc.), are improving interoperability, user experience and privacy management through the integration of technologies based on generative artificial intelligence.

For the widespread adoption of these standards, despite the progress, some challenges remain, for example:

• Hardware compatibility: smart devices are not always designed to support new versions of WiFi standards, which require specific, more modern hardware technologies (such as advanced antennas or particular chipsets);
• Spectrum management: a major challenge to ensure that all technologies can coexist without problems. WiFi standards developers must work on techniques to avoid interference with other technologies that operate on similar frequencies, such as 5G or WiFi HaLow;
• Integration with existing technologies, such as 5G and the remaining Smart Home protocols (5G and WiFi are complementary technologies, but they must be properly integrated, ensuring continuous coverage for users).
• Generally sensor data integrity is key to grant seamless data sharing across different IoT networks, and communication of the devices from various manufacturers, overcoming interoperability issues.

Typical IoT Deployment Architecture

An IoT tracking system typically involves sensors that collect data. Then, communication networks for data transmission, and lastly, cloud platforms for storage and processing. Edge computing may also be used for real-time data processing closer to the source, helping to reduce latency and enhance speeds.

Smart tracking with IoT: Connectivity Challenges

Ensuring reliable connectivity for IoT devices can be difficult, especially in remote or unstable environments. Additionally, the cost and power consumption of maintaining continuous connectivity can be high. Overcoming these challenges is essential for large-scale IoT deployments.

IoT tracking system: Identity & Authentication

Securing IoT traceability standards devices through proper identity and authentication mechanisms is crucial to ensure the integrity of the data they generate. Without these protections, unauthorized access and data tampering become significant risks.

Regulatory traceability IoT: Sensing & Data Collection

The accuracy of data collected by IoT sensors is vital for supply chain operations.
If IoT traceability sensors fail to provide accurate readings, it can lead to costly mistakes, such as incorrect inventory levels or product quality issues. Ensuring sensor reliability is key to successful IoT deployments.

IoT traceability: Actuation & Automation

IoT traceability devices can also automate processes based on real-time data.
Actuation involves using sensors to trigger automatic actions, such as updating inventory levels or sending alerts. Automation allows IoT tracking systems to execute predefined processes, reducing the need for manual intervention.

Blockchain for IoT Traceability: Challenges and Limitations

Blockchain may add a layer of security and transparency to IoT systems, making it a smart solution for improving traceability. But at the same time some limitations and challenges in the integration must be considered.

IoT data tampering prevention: the Need of Security & Trust

Blockchain’s immutable, tamper-proof nature ensures that data cannot be altered once recorded. This makes the system highly trustworthy, as all stakeholders can verify the accuracy of the data. Blockchain in IoT supply chain reduces fraud and ensures the integrity of the information being shared across IoT networks.

Blockchain in IoT supply chain: Automation

Smart contracts based on predefined conditions can automate IoT tracking system.

For example, when a sensor detects a certain event, a smart contract can trigger updates to the blockchain, notify stakeholders, or even initiate payments.

IoT and blockchain integration

While blockchain offers numerous benefits for IoT traceability, it’s not without its challenges.

Blockchain traceability solutions: Scalability & Costs

As the number of IoT devices increases, so does the volume of data and transactions that need to be processed. Blockchain systems can become slow and expensive to operate at scale, especially in public blockchains with high transaction fees.

IoT traceability standards: Legal & Regulatory Gaps

Blockchain’s decentralized nature creates regulatory challenges, especially in industries with strict compliance requirements. Different countries have varying data privacy laws and security, which can complicate global IoT implementations. Businesses must navigate these regulations carefully.

Blockchain sustainability tracking: Energy Consumption

Blockchain, particularly proof-of-work systems, can be energy-intensive. As IoT systems grow, the environmental impact of blockchain mining becomes a concern. Alternatives like proof-of-stake are being explored to reduce energy usage, but blockchain sustainability tracking remains a key challenge.

Implementing Blockchain for IoT Traceability

Successfully integrating blockchain in IoT supply chain systems requires careful planning and the right infrastructure.

Blockchain traceability solutions: Choosing the Right Blockchain

Businesses must choose between public, private, or consortium blockchains depending on their need for transparency, control, and scalability. Public blockchain traceability solutions offer transparency but can struggle with scalability, while private blockchains offer more control but less openness.

Integration with Existing Systems

Integrating blockchain-enabled IoT tracking with existing IoT infrastructure, cloud computing, and AI and IoT in traceability systems requires careful coordination. The goal is to leverage the strengths of each technology using blockchain for security and transparency.

Blockchain in IoT supply chain: what’s ahead

Blockchain offers significant potential for improving IoT traceability by providing enhanced security, transparency, and automation. However, challenges related to scalability, costs, and energy consumption must be addressed for widespread adoption. As blockchain technology evolves, it will probably play a significant role in optimizing IoT systems for better traceability.

Looking forward, the next step in improving supply chain transparency lies in standardizing product identification with GTIN codes.

In our next article, we will explore how these codes are essential for compliance and maintaining supply chain integrity. Stay tuned for more insights on the future of traceability.

Coming soon: GTIN Codes & Global Traceability: Standardizing Product Identification for Compliance & Supply Chain Integrity